Business Directories

Western states step up sanctions on Iran

Washington, November 22, 2011

The US, Britain and Canada have announced new sanctions on Iran's energy and financial sectors, steps analysts said may raise pressure on Tehran but were unlikely to halt its nuclear program.

The US named Iran as an area of 'primary money laundering concern,' a step designed to dissuade non-US banks from dealing with it; blacklisted 11 entities suspected of aiding its nuclear programs; and expanded sanctions to target companies that aid its oil and petrochemical industries.

The US stopped short, however, of targeting Iran's central bank, a step that could have cut it off from the global financial system, sent oil prices skyrocketing and jeopardised US and European economic recovery.

In a coordinated action, Britain ordered all British financial institutions to stop doing business with their Iranian counterparts, including the Iranian central bank. A source familiar with the sanctions said the steps would not directly target trade in Iranian oil.

Canada said it would ban the export of all goods used in Iran's petrochemical, oil and gas industry and 'block virtually all transactions with Iran,' including with its central bank, with an exception for Iranian-Canadians to send money home.

While not taking concrete actions, France urged European Union and other nations to immediately freeze the assets of Iran's central bank and to suspend purchases of Iranian oil, steps it called 'sanctions on an unprecedented scale.'

The series of announcements were in response to a Nov. 8 International Atomic Energy Agency report that presented intelligence suggesting Iran had worked on designing an atomic bomb and may still be secretly carrying out related research.

That report, calls by US lawmakers to sanction Iran's cental bank and media speculation about a possible Israeli military strike against Iran's nuclear sites have pushed the Obama administration to seek tougher sanctions against Tehran.

Analysts said they did not believe the steps would dissuade Iran from pursuing its nuclear program, which Washington and its allies suspect is a cover for seeking nuclear arms. Iran says its nuclear work is entirely peaceful.

'Is this the straw that will break the camel's back? No,' said George Perkovich, director of the Nuclear Policy Program at the Carnegie Endowment for International Peace, a Washington think tank.

The range of unilateral steps planned by Western powers reflects the difficulty of persuading Russia and China not to veto further measures at the UN Security Council, where they have supported four previous sanctions resolutions.

The US decision to name Iran as a money laundering concern has no direct effect - US banks are already barred from transactions with Iranian financial institutions - and seems more a warning about the risks of dealing with Iran.

US Treasury Secretary Timothy Geithner said any bank that deals with Iran's central bank or other financial institutions runs the risk of supporting Iran's 'illicit activities' such as its alleged pursuit of nuclear weapons, support for terrorism and efforts to evade sanctions.

"Any and every financial transaction with Iran poses grave risk of supporting those activities, so financial institutions around the world should think hard about the risks of doing business with Iran," Geithner said in a joint appearance with US Secretary of State Hillary Clinton to announce the steps. - Reuters